June 2001 1

Canada

The Multimedia Nirvana

June 2001 2

A Growing industry, with strong clusters, and a focus on exports ..

Three provinces account for over 70% of Multimedia activities,

Over two-thirds of our multimedia companies serve customers in the business sector and over half serve customers in the educational sector

Over two thirds of Canadian companies export, over half serve the US market

Ontario 26%Quebec 26%British Columbia 21%

Size

2300 Companies

18,000+ Employees

$3 Billion in revenue

20% Growth Rate

Strengths

Entertainment

Animation & Special Effects

Games, Interactive Content

Education

Corporate Applications

June 2001 3

Industry is open to Investment and Partnership Opportunities

Small, dynamic companies are a dominant force in the industry

91% of firms are privately held

Most are less than five years old and have less than 10 employees

Industry is ripe for ...

Direct Investment

Partnerships and Alliances

In addition to solid and growing broadband penetration, wireless companies like Profilium, Airborne Entertainment, and

Kalador, are finding that Canada is a good place to develop and test new and innovative wireless multimedia applications

June 2001 4

The Trend1980’sThe Eighties were dominated by companies creating CD ROM games, educational software and business applications or ‘edutainment’.

1990’sThe Nineties have seen the continued importance of game developers, a rise in animation and special effects capabilities, education products, and growing specialties in web development as bricks and mortar companies look to develop an interesting, exciting and interactive web presence.

Looking AheadDevelopment for Wireless Devices and Broadband Networks. Partnerships and alliances will be critical, as companies consolidate and merge to form real SMEs … and go after larger projects.

June 2001 5

A Wealth of Talent

Canada has no shortage of new talent, with over 100 new media programs offered by professional schools and education institutions, including,

Banff Centre for the Arts www.banffcentre.ab.ca/cfaCanadian Film Centre www.cdnfilmcentre.comCentennial College www.centennialcollege.caEmily Carr Institute of Art and Design www.eciad.bc.caNational Animation and Design Centre www.nad.qc.ca

(Centre NAD)Nova Scotia College of Art and Design www.nscad.ns.caSheridan College www.sheridanc.on.caTechnical University of BC www.techbc.caUniversity of British Columbia www.ubc.ca

With innovative programs in 2D & 3D animation, video game design and programming, these institutions turn out talented and sought after students, and provide state of the art research and incubation facilities.

June 2001 6

And Industry SupportAcross the Country

Alberta New Media Association www.albertanewmedia.com

Alliance NumeriQC www.numeriqc.ca

Edmonton New Media Association www.enmi.ab.ca

Interactive Multimedia and Arts Association www.imat.ca

Liberty Village New Media Centre www.lvnmc.com

New Media BC www.newmediabc.com

New Media Innovation Centre www.newmic.com

New Media West www.min.mb.ca/west.html

Saskatchewan New Media Developers www.snmda.sk.ca Association

June 2001 7

A Solid InfrastructureFirst, we Built …The worlds fastest, first, all optical network, CA*Net 3.

Next, we’ve ...Committed to providing broadband access to all Canadian communities by 2004.

Then we Connected …All of our Schools and Libraries to the Internet (1999).

Where are we?• Canada is tops among G7 countries in the share of its population that uses the Internet.• Canadians spend the most time online, with 932 minutes in April, according to Jupiter Media Metrix.• A recent survey by Kinetic Strategies Inc. puts Canadian broadband penetration rates at double the US. Broadband penetration in Canada is equal to 15%.

June 2001 8

Next Door to ...… A $9 Billion MarketCanada provides long-term, assured, access to the North American market : nearly 400 million people with a combined GDP of over $9.4 trillion ($US)

Canada and the US have the largest 2 way trade partnership, with two-way trade amounting to C$502 billion in 1999 ($1.38 billion per day)

… With Guaranteed AccessIn addition to eliminating tariffs, the North American Free Trade Agreement provides procedures for border facilitation, movement of personnel, investment and intellectual property protection, and product certification

… and MoneyUS Venture investments in emerging enterprises reached $103.0 billion, and 5,380 companies in 2000

Calgary Regina

Halifax

Los Angeles

Denver

New York

Boston

Philadelphia

Washington

BaltimoreDetroitChicagoCleveland

St. Louis Pittsburgh

Milwaukee

Houston

Atlanta

Vancouver

Toronto

Montréal

Seattle

Miami

Mexico City

San Francisco

Winnipeg

300 mi

600 mi Charlottetown

St. John's

Edmonton

VictoriaOttawa

Windsor

QuébecFredericton

June 2001 9

But don’t take our word it.Our success speaks for itself,

with Awards,

Mainframe Entertainment’s popular computer-generated television series Reboot is enjoyed by millions around the world. The company’s animations can be seen on ABC, the Cartoon Network, Fox Kids and Fox Family Channel. Mainframe’s Beast Machines, The Series, won the World Medal in the Youth/Young Adults TV Programming at the 2000 New York Festivals.

The Vancouver area studio of computer and videogame powerhouse ElectronicArts is a hits factory. EA games are enjoyed by millions worldwide, andconsistently bring home the industry's top awards. In 2001, the Academy ofInteractive Arts and Sciences honored EA's new fast-paced snowboarding titleSSX with 5 awards, including Console Game of the Year. Other EA hit titlesproduced in Canada include the perennial best-selling FIFA soccer series,NHL Hockey, Triple Play Baseball, NBA Live, Need of Speed, and many more.

June 2001 10

But don’t take our word it.Our success speaks for itself,

with Awards,Discreet has been well recognized at the Academy Awards …

in 1999, the company received the Scientific and Engineering Award in 2000, all films nominated for Oscars in the Special Effects category used Discreet products, and, again, in 2001, all films nominated for Oscars in the Special Effects category used Discreet products.

The most successful movie of 2000 was powered by multimedia software developed by Alias/Wavefront. Director Ron Howard used visual effects studio Digital Domain and Alias/Wavefront’s Maya program to render a virtual Whoville in three dimensions for The Grinch.

Game company, BioWare, recently won 11th spot on this years Profit 100 list of Canada’s Fastest Growing Companies. The company has achieved enourmous success with their ‘fantasy saga’ Baldur’s Gate, which has sold over 3 million copies, and launched them into a contract developing a Star Wars game for LucasArts.

June 2001 11

… Investments,

Technicolor has started construction on a state-of-the-art $45-million motion picture release plant in suburban Mirabel (Montreal).Playback Magazine, March 5/2001

As part of the merger between Seagram Co. and Vivendi SA, the recently formed Vivendi Universal says it will invest $300 million in the Canadian film, music and Internet industries over the next five years.CP, January 26, 2001

French video game giant Gameloft, co-owned by Ubisoft and Guillemot Corp. of France, is investing $80 million to establish a world development centre for its video games in Montreal.

Infogrames Entertainment, also from France, will create 200 multimedia jobs at its new Montreal digital studio.

June 2001 12

…and, of course, Repeat Business!

Electronics, Dr. Pepper/7-UP, Absolut Vodka and Shockwave/Macromedia have tapped Splashworks to design tailor-made electronic games for cyberadvertising.

Radical Entertainment produces some of the best-selling interactive console and CD-ROM games for its international partners, including NHL Championship 2000 for Fox Sports Interactive and Jackie Chan's Stuntmaster for Midway.

MathResources produces educational CD-ROMS for institutions in Connecticut, Vermont, Maine and Massachusetts. By 2002, more than 5 million school children in India will be using the company’s advanced educational products.

The Toybox division of Command Post and Transfer Corporation has worked on a long line of Hollywood films, including The Cell, Fight Club, eXistenZ, Keeping the Faith and The Game.

June 2001 13

Canada, and Gladiator?

One of the hottest movies of 2000, Gladiator, relies on 3-D special-effects software designed by Montreal’s Softimage. The creators of Gladiator used cutting-edge products from both Softimage and special-effects house Discreet Logic to combine computer-graphics with live-action footage to bring new life to ancient Rome ….

To work this big-screen magic, the folks at effects house Mill Film relied heavily on the 3-D special-effects software produced by Softimage... In fact, much of the high-tech work on Gladiator comes courtesy of Montreal space-age know-how. Robin Shenfield, CEO of Mill Films, said that, in addition to the Softimage 3-D software, his company also made much use of products from fellow Montreal special-effects outfit Discreet Logic to meld the computer-graphics with the live-action footage in Gladiator.

Montreal Gazette, May 2000

All images from VFXPro.com

June 2001 14

An Active Domestic Industry

Multimedia Victoria New Media Conference February, Victoria Vancouver Effects & Animation Festival April, Vancouver Canadian New Media Awards May, Toronto MIM, Multimedia International Market October, Montreal Baddeck New Media festival October, Nova Scotia ACM New Media conference October, Ottawa Ottawa Int'l Animation Festival October, Ottawa Softworld November, Vancouver

Film and Television Victoria Indie Film & Video Festival February, Victoria Banff Television Festival June, Banff Convergence TV August, Toronto Montreal World Film Festival August, Montreal Toronto Int'l Film Festival September, Toronto

June 2001 15

With Clusters of Activity in...Montreal

Traditional Strengths andInnovative Technology Breed Success

Creative and bilingual work force, feed off a vibrant television and movie production tradition, creating niche strengths in animation, graphic design, special effects, post production, multilingual software and games production.

With over 500 Multimedia companies, and two-thirds of all employment, Montreal dominates the Quebec Multimedia scene … and this is just the beginning. The Montreal industry is set to double in size every three years.

“More than 80% of the world`s animation and special effects software comes from locals (Montreal) like Softimage and Discreet Logic".

Wired Magazine, July 2000

June 2001 16

MontrealYoung, Dynamic, Robust … Key Factors to Your Success

Over $1Billion in revenue.

A young, dynamic workforce … average age of employees is 30.

Supported by 45 industrial complexes and technoparks, fed by 32 junior colleges and 8 university programs.

PricewaterhouseCoopers ranks Montreal fifth out of North America’s top 15 cities … in terms of new economy employees per capita.

“The quality of software that we are producing here is comparable to that being produced in our Germany and California research centres.”

Lore Labarse, Director of SAP Labs (Canada)

June 2001 17

Multimedia CityThe VisionNew developments and old renovations 10 state-of-the-art buildings over a 10year period.

1.5 million sq feet leased exclusively to companies involved in the sector.

The SupportA government initiative to encourage and support multimedia development in Montreal ... backed by a $350 Million investment.

40% tax credit for employees whose job pertains 90% or more to technology, renewable each year until January 2011, for any multimedia city tenant meeting the criteria.

UbiSoft, SAP Labs, Motorola, Cognicase and Discreet have already signed Multimedia City leases

June 2001 18

Greater Toronto

Strength and Size

Toronto features over 500 multimedia companies, employing over 4000 people.

The region accounts for 70% of the multimedia industry in the province of Ontario (followed by Ottawa and Kitchener-Waterloo).

The majority of companies operate in the content production and design sector and there is a strong focus on the Canadian market.

15% of the clusters revenues stem from the American market.

Annual Growth Rates of 20-25% Sales of $1Billion

June 2001 19

Greater TorontoDiversity, ProductivityThe New Media Trainers Alliance is working to ensure quality in new media education .. this consortium new media training and capabilities and includes local heavyweights, Seneca College, Academy of Design, Humber College, Ryerson University, Sheridan College, Centennial College, and George Brown College.

IT Companies are attracted by the quantity and quality of the talent :

• High productivity with $100-$150K per employee per year,• The area’s 8 Universities and 14 colleges will provide approx 5,000 new IT&T grads in 1999.

Sheridan College is the third largest classical and computer animation school in the world.

It receives 33 applications for every available seat in its animation program.

June 2001 20

Greater TorontoSupportOntario Computer Animation and Special Effects Tax CreditThe OCASE is a refundable tax credit based on Ontario labour expenditures incurred by a corporation in computer animation and special effects activities. The tax credit is calculated as 20% of eligible expenses.Labour expenses for individuals working in Ontario, who are not employees of the corporation, may be eligible for a 50% tax credit.

Ontario Interactive Digital Media Tax CreditThe OIDMTC is a refundable tax credit of 20% of eligible Ontario labour expenditures incurred by a qualifying corporation to develop interactive digital media products for commercial exploitation in Ontario. To claim an OIDMTC, a corporation must file with its tax return a certificate obtained from

the OFDC.

Ontario Media Development Organizationwww.omdc.on.ca

June 2001 21

Greater VancouverEducated and Growing FastVancouver has experienced a 30% annual growth rate, and multimedia company revenues for the city are now estimated at $1 Billion.

95% of workers have post secondary diplomas.

Cluster is dominated by a few international companies and many small players,

• 7% of Vancouver companies generate over $10 million,• over 50% of Vancouver companies generate under $500,000 annually• Consolidation is ongoing.

Interactive games, animation and web services are most active segments.

Electronic Arts recently built one of the largest studios near Vancouver … encouraging the continued growth of the gaming and entertainment

cluster on the west coast

June 2001 22

Greater VancouverA Strong Network of Support

New Media Innovation Centre (NewMIC) … created by government, industry, and university consortium to promote R&D in New Media.

University of British Columbia' s Media and Graphics Interdisciplinary Centre (MAGIC) is involved in digital and post-production and the development of educational video games.

Simon Fraser University has developed a commercial server-based software system (Virtual-U) for the delivery of educational and training programs.

TechBC (The Technical University of British Columbia) offers online and onsite Bachelors, Masters and Ph.D programs in Interactive Arts. The initial focus is on Performance Media and Interactive Design to prepare students to lead and participate in the games, communications, online learning, and arts industries. In addition, TechBC hosts labs for R&D in interactive, and shared virtual environments.

Other IT institutions such as the British Columbia Institution of Technology, Emily Carr Institute, and the Vancouver Film School provide graduates with software development and multimedia skills and training, while also undertaking numerous research projects.

June 2001 23

CanadaWe Offer You...

Investment and Partnership Opportunities

+ A wealth of Graduates produced bySolid Educational System

+ Access to the US Market throughNAFTA

+ A Diversified and Growing IndustryWith Growing Broadband Penetration

+ Solid Clusters with Niche Specialties

June 2001 24

CanadaMultimedia Nirvana!

Canada IrelandHeather Moncur Marie StampInt’l Business Development, ICT Canadian EmbassyIndustry Canada 65 St. Stephen’s Green613-954-4803 Dublin 2moncur.heather@ic.gc.ca stamp.marie@dfait-maeci.gc.cahttp://investincanada.gc.ca 353-1-478-1988

For a copy of this material visit http://investincanada.gc.caIndustry Sector Advantages

Information and Communications Technologies

United Kingdom United KingdomGeorge Edwards Patrick MatternCanadian High Commission Canadian High CommissionMacdonald House Macdonald House1 Grosvenor Square 1 Grosvenor SquareLondon W1K 4AB London W1K 4AB+44 (0)20 7258-6680 +44 (0)20 7258-6659george@canadauk.com investment@canada.comhttp://www.dfait-maeci.gc.ca/london http://www.dfait-maeci.gc.ca/london